According to the statement, these new agreements, along with the previously-announced agreement with Warner Home Video, will provide day-and-date availability of movies for Blockbuster’s store and by-mail channels. Additionally, these studios will provide new enhanced payment terms to Blockbuster in exchange for a first lien on Blockbuster Canada Co.’s assets. Blockbuster Canada will continue with business as usual.
“These important steps with three of the leading movie studios will continue a steady supply of top-rated movies for Blockbuster customers,” said Tom Casey, Blockbuster Inc. Executive Vice President and Chief Financial Officer. “These positive signs of studio support are part of our overall recapitalization effort to drive top-line performance while reducing debt and operating costs at Blockbuster. This affirms our strong and collaborative business relations with these critical vendors.”
The new payment terms help Blockbuster continue the recapitalization initiatives already underway. Management has previously announced a number of concurrent efforts to recapitalize the company and assure its long-term growth and success. Blockbuster will continue to rationalize its U.S. store portfolio and aggressively manage working capital. Additionally, Blockbuster has implemented a plan that cuts operating costs by $200 million this year to preserve cash and further improve liquidity. Blockbuster is also in discussions with advisors for its bondholders related to debt recapitalization.
“We will continue to offer our customers all types of innovations as the leading multi-channel provider of entertainment including the recently announced agreement with Warner Bros. Home Entertainment Inc. for immediate availability of new titles, the addition of BLOCKBUSTER On Demand for select Samsung 2010 Blu-ray Players, HDTVs, and Blu-ray Home Theater Systems, and the addition of BLOCKBUSTER On Demand for smart phones launched recently on T-Mobile’s HTC HD2,” said Casey.
For more information visit: www.blockbuster.com